Choices, choices: swipe, dip or tap?

Who says plastic payment cards are dead? While the advent of Apple Pay and similar mobile payment apps led some experts to predict that cards would go the way of the dinosaur, new research from Auriemma Consulting Group suggests that's not happening. Consumers have continued to swipe and dip physical cards into POS devices, and now they're beginning to use the tap-and-go feature available on many credit and debit cards. Chalk it up to an aversion to change.

"Consumers have been repeatedly asked to change their payment behavior," said Jaclyn Holmes, director of Auriemma Research. "While adjusting to various card payments is easy, the larger switch in the physical mechanism of phone payments takes more time."

Indeed, new research from Auriemma suggests consumers are much more comfortable tapping their plastic (contactless enabled) credit and debit cards to make payments than they are tapping their smartphones to make payments. Only a third of consumers with mobile payment enabled smartphones have used the devices to make payments, compared with 59 percent of contactless cardholders who have tapped those cards to make a payment, according to Auriemma's latest Mobile Pay Tracker.

Visa, Matercard mandate NFC

Auriemma surveyed just over 1,500 consumers with payment enabled smart phones and at least one general-purpose credit card for the latest issue of its Mobile Pay Tracker. Contactless cards, like mobile payment apps, use near field communication (NFC) to support communications with POS devices. And although credit and debit cards containing EMV chips are designed to support contactless payments, most POS terminals have not been programmed to support NFC technology. That's beginning to change, however, as both Mastercard and Visa have mandated that all POS devices support contactless payments by 2020.

The mandate was seen as a boon to mobile and contactless card payments, opening up millions of new locations to these payments. However, Auriemma's research indicates consumers are still unsure. Overall, Auriemma found that consumers are uncertain about whether contactless card payments are better or worse than mobile payments – 65 percent said they are about the same, 18 percent said they are better and 17 percent said they are worse.

Consumer preferences differ

Consumers who believe contactless payments are better typically point to factors such as speed, ease of use and better security. These are the same factors that mobile payment users cite when asked to describe the benefits vis-à-vis plastic, Holmes noted. Those who believe contactless payments are worse most often point to concerns about security (they consider them more susceptible to fraud), and they point out that they still need to take their cards out of their wallets.

"Consumers will have more options at the checkout than ever before, but will they choose contactless cards or a mobile wallet?" Holmes asked. "Although upgraded terminals benefit both methods, the point-of-sale experience continues to be fragmented for mobile payment users who must pull out their physical card when things go awry."

Holmes suggested card usage will still prevail, since consumers can use the same card to swipe, dip or tap. This alone makes a better case for contactless cards, she said.

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